Archive for March 10th, 2011

Video Of The Day: Bloomberg TV – FusionIQ’s Ritholtz Interview About Financial Markets

Barry Ritholtz, chief executive officer at FusionIQ, talks about the outlook for financial markets after the Federal Reserve ends its program of quantitative easing. He speaks with Tom Keene on Bloomberg Television’s “Surveillance Midday.”

Daily Reading – Thursday, March 10, 2011

*** Zero Hedge: Exclusive: Bill Gross Dumps All Treasuries, Brings Total “Government Related” Holdings To Zero, Flees To Cash – No QE3? ***
*** self-evident: Reading comprehension quiz ***
*** Zero Hedge: Nomura Commodity Desk Liquidation Blamed For Commodity Weakness ***
*** Macro Man: Yours! ***
*** FT Alphaville: More proof the Chinese have been using copper as collateral ***
*** FT Alphaville: Carry trade as canary in the coal mine ***
*** The Big Picture: The End of QE: Part II ***
*** The Independent: World’s sixth mass extinction may be underway – study ***

U.S. Petroleum Weekly – March 10, 2011

Libya is out of the markets for some time. If demand stays at recent levels crude oil price will go up.
In U.S.: Markets are well supplied, demand historically speaking weak, refining capacity utilization low and crude oil imports. WTI – Brent pricing disparity lower, but still very high.
Refining industry discipline, stockpiling ahead of expected rise in prices and seasonal demand patterns are (very slowly) bringing down stockpiles.

U.S. Initial Jobless Claims At 397.000; Up 26.000

Initial jobless claims in the U.S. were reported at 398.000 vs. 376.000 consensus and last week revised (up 3.000) reading of 371.000.

Four weeks moving average steady.

Spain Downgraded By Moody’s

Moody’s downgraded Spain’s sovereign credit together with the Spanish bank recapitalization fund rating to Aa2 from Aa1. Oultook negative.

Not much happening with Spanish spreads after the downgrade.

China Reports Unexpected Trade Deficit

China trade balance was reported at USD -7.3 billion vs. USD 6.45 billion in January and USD 4.9 billion consensus. Export and import growth were running at 2.4 and 19.4 percent vs. 37.7% and 51.0% y-o-y in January.

Large unexpected surprise, but something I hinted earlier in my dry bulk weeklies. Concerning deficit itself it’s probably result of seasonal effects (Lunar New Year) and POBC tightening measures. I expect some normalization in March, but nevertheless the market reaction could be violent in coming days because this is a game-changer, especially in relation to yuan appreciation calls.

POBC tightening to contain inflation will probably have to be relaxed or even reversed because Chinese government faces two alternatives: 1. higher growth & higher inflation vs. 2. lower growth & lower inflation. The outcome of this is pretty clear.

 

Get Adobe Flash player